Size clause for SEZs to go

The government is planning to do away with the minimum area requirement for designating special economic zones.

At present, a minimum 1,000 acre is a must for an area to be designated as a special economic zone.

Government officials say the move will help in setting up SEZs in smaller zones which can focus on manufacturing of specific products. Zones specialising in handicrafts and gems and jewellery have already come up in Moradabad and Surat, respectively.

The move, proposed by the commerce ministry, is, however, facing opposition from the revenue department which is against too many SEZs. The matter was discussed at a meeting of the board of approvals for SEZs on Friday.

"The size of the domestic tariff area is continuously shrinking and could spell trouble for revenue collections," said an official.

The board also deliberated on giving a go-ahead to SEZs in Mundhra and Greater Noida. While the project in Mundhra is a private sector initiative, the Greater Noida SEZ is being promoted by the Uttar Pradesh government.

Since April 2000, when the government announced the setting up of new SEZs and conversion of export processing zones into SEZs, the commerce ministry has cleared proposals for more than 30 new projects.

Among the greenfield projects, only one in Indore has come up while the others have run into trouble due to unavailability of land and the absence of clear cut policy guidelines, particularly in states.

None of the SEZs, proposed to be developed by the private sector, have been set up so far.

Officials said it would be simpler to set up zones which are smaller in size as land availability would be simpler.

"Smaller zones would be of great help in areas like the Northeast part of the country," an official said.